IBF Financial Holdings Co., Ltd. (TWSE:2889) signed a share swap agreement to acquire EnTie Commercial Bank Co., Ltd. from The Longreach Group Ltd., ORIX Corporation (TSE:8591) and others for TWD 33.7 billion on October 14, 2021. IBF will pay TWD 9.466730 in cash and 0.493344 IBF preferred shares (the issue price is expected to be TND 15.70), equivalent to TND 17.212231 per share in total as the transaction consideration mix. Upon completion of the share swap transaction, EnTie will become a wholly-owned subsidiary of IBF and both, EnTie and IBF will continue to exist. The completion of the share swap proposal still depends on whether a number of prerequisites are met, including but not limited to the approval of the share swap proposal and the share swap agreement by the shareholders of EnTie and IBF; the permission, consent, or approval of the relevant competent authorities and institutions; or the filing entering into effect, etc. EnTie has established an audit committee acting as the special committee for merger and acquisition, to provide an opinion on the fairness of the share swap. The audit committee deliberated on the fairness and reasonableness of the share swap proposal and approved the proposal on October 14, 2021. IBF also established a audit committee or remuneration committee which includes Ching-Sung Wu and Wei-Lung Che, both Independent Directors of IBF. The audit committee of IBF has raised objection with regards to share swap, stating that consideration sitting on a higher side is not fair and reasonable and transaction cannot help the growth of business of IBF but complicates the structure of major shareholders of IBF and causes the difficulty to implement the corporate governance. IBF board also approved the transaction with majority vote including Chen Shu Chuan and Shihchen Joseph Jao, both Independent Directors of IBF. EnTie will convene an extraordinary general meeting of shareholders on December 2, 2021. If the shareholders meeting passes the share swap proposal and share swap agreement by resolution, an application will be filed to delist EnTie from the Taiwan Stock Exchange.
Transaction will have no impact on net worth per share and earnings per share of EnTie. Shu-Chen Chang of BDO Taiwan, Investment Banking Arm acted as fairness opinion provider to the audit committee of EnTie. Shu-Chen Chang of BDO Taiwan acted as accountant to EnTie. Chen, Wei-Yue and Philip Chen of JYH HER CPAs, Investment Banking Arm acted as fairness opinion providers to IBF. Chen, Wei-Yue of JYH HER CPAs acted as accountant to IBF. BNP Paribas SA (ENXTPA:BNP) and KGI Securities Co. Ltd. acted as financial advisors, Ernst & Young Global Services LLP acted as accountant and Lee and Li, Attorneys-at-Law acted as legal advisor to IBF.